Sector rotation that has been going on for about a month is no longer stealthy and cannot be ignored.  Last week, Energy was the best performing sector followed by Financials and Industrial, while defensive names like Utilities and Consumer Staples were the worst performing.

Growth at any price may have found a price.  Technology and Communication Services names put in pedestrian performance, and even this morning look rather lackluster, which is why the NASDAQ is indicating to open lower while the S&P could pop at the starting bell.

If you want to see a longer-term sustainable rally, then you want to see continued rotation into other areas of the market.

Cleared for Takeoff

Keep an eye on Industrials, which continue to fly high led by airline names.  This morning’s drivers:

• Mesa Airline (MESA) May operating metrics
• Alaska Airline (ALK) upgrade at Bank of America
• Boeing (BA) upgrade at Seaport and target $277

The Sector (XLI) breaks out at 76.00 and could quickly climb to the 2020 high point.

Sharing the Wealth

Last week was remarkable, not only because the market rocked, and more stocks turned positive for the year, but the rally did not need leadership from Technology or Communication Services.

• Winner 182 from 110, +12.5% on average
• Losers 323 from 395, -17.1% on average

Portfolio Approach

We are adding a position in Technology this morning in our Hotline Model Portfolio.

Today’s Session

This morning, Wall Street is catching up with the market with major upgrades.

• Amazon (AMZN) $3300 from $2700 at RBC Capital
• Lulu Lemon (LULU)  $360 from $230 at TAG